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ENERGY

Will Germany set a gas price cap?

As energy costs rise further, more German politicians are coming out in favour of a cap on gas prices - and the government is reportedly looking into the matter.

Will Germany set a gas price cap?
A person turns the knob on their heating device (Photo by Ina FASSBENDER / AFP)

What’s happening?

With electricity bills having doubled in some cases and German inflation seeing post-war record highs of 7-8 percent each month, the German government has been making a lot of money available to help give some relief to people struggling with their bills.

Some of this money is designed to specifically target the financial pressure brought on by the rising price of natural gas – which around half of German households use for heat. Gas also supplies around a quarter of German electricity, but has nearly quintupled in price.

The government’s relief measures include one-off payments and a cut on the VAT put on natural gas from 19 percent to 7 percent.

READ ALSO: KEY POINTS: Everything Germany is doing to help relieve rising energy costs

But more politicians and experts are saying that’s not enough, and are calling for the federal government to pass a Gaspreisdeckel – a cap on the price of gas.

The Left Party has been advocating such a cap for months. But this week, leader of the conservative opposition Christian Social Union (CSU) Markus Söder, whose Bavarian party is sister to the Christian Democrats in the rest of the country, also called for a gas price cap.

“We are experiencing an unprecedented increase in the price of gas and it is essential to prevent normal earners from becoming low earners,” he said.

CSU Leader and Bavarian Premier Markus Söder is in favour of a gas price cap. Photo: picture alliance/dpa | Nicolas Armer

He says the federal traffic light coalition should also abandon plans for its gas levy, which passes on some of the higher costs of importing gas to consumers, and to suspend the national debt brake. That would allow more government money to be spent on relief.

READ ALSO: Germany to push ahead with gas levy plans

Alexander Dobrindt, who leads the CSU in the Bundestag, says a gas price cap should cover 75 percent of consumption in private households, with the remaining 25 percent determined by market rates. Dobrindt argues that allowing the last quarter to fluctuate would incentivise people to still save energy.

Who else wants it?

Söder’s CDU colleagues in the Bundestag say they’re also in favour of a short-term cap on gas prices to get through the winter.

Berlin Mayor Franziska Giffey also called for a cap this week.

She says she’s in favour of a Energiepreisdeckel – or a cap on electricity prices that goes beyond simply gas prices, and intends to take the matter to a meeting the 16 federal state bosses will have with Chancellor Olaf Scholz and his federal government on September 28th.

READ ALSO: German word of the day: Deckel

“The government needs to put an energy price cap in and give people the security they need to sleep peacefully again,” said Giffey, who unlike opposition politicians like Söder, comes from the same Social Democratic Party as Chancellor Olaf Scholz.

Berlin Mayor Franziska Giffey, from Olaf Scholz’s Social Democrats, wants an electricity price cap for both households and businesses. Photo: picture alliance/dpa | Wolfgang Kumm

She says that businesses threatened by rising costs should also benefit from a cap, alongside private households. She says the national debt brake should be suspended to pay for this.

In an interview with public broadcaster ZDF, economics professor and member of the federal government’s economic experts committee Veronika Grimm also called for a gas price cap, provided it still be set up to give people an incentive to save energy.

The Federal Association of German Housing and Real Estate Companies (GdW) is also calling for a federal gas price cap, warning that many tenants may not be able to pay their utility costs.

READ ALSO: Tenants in Germany need eviction protections during energy crisis, says housing boss

What is the government doing about it?

Energy and Economics Minister Robert Habeck of the Greens ruled out a cap on gas prices earlier this week, but Finance Minister Christian Lindner of the liberal Free Democrats has set up a working group that will look at capping gas prices.

The expert group will examine whether a gas price cap is possible, how it might be put into place, and how such a cap would be paid for, ahead of consultations with the federal state heads next week.

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GERMAN POLITICS

EXPLAINED: Why Berlin could vote again after 2021 election disaster

Long lines, ballot shortages, and logistical snafus mean the capital will probably have to repeat the 2021 election. Now the federal traffic light is weighing in. We explain a few possible scenarios.

EXPLAINED: Why Berlin could vote again after 2021 election disaster

If there’s one place in Germany where the myth of German efficiency goes to die, it is Berlin.

Whether it’s the BER airport – eight years delayed and frequently plagued by security staff shortages and long lines – or whether it’s the two-month wait to get a Bürgeramt appointment to register your apartment or get your driver’s license, the capital is infamous for its bureaucratic dysfunctionality.

Now we can add the 2021 election to the list.

Run the same day as the world-famous Berlin Marathon, many inner-city polling stations along the Berlin route ran out of ballot papers because delivery trucks couldn’t get them there fast enough.

The lines grew, some people left them, and many voting stations stayed open after the 18:00 deadline, leading the city’s constitutional court to declare last week that the snafus likely affected the final result – meaning Berliners would probably have to vote again.

The federal traffic light coalition though, is already weighing in and preparing for a revote in some constituencies.

READ ALSO: Berlin hit by ballot shortages and long queues amid marathon chaos.

What contests might have to be run again?

Election day in September 2021 saw Berliners with German passports cast votes for their federal representatives in the Bundestag, their state parliamentarians, and a referendum on whether to expropriate large corporate landlords.

Meanwhile, Berliners from other EU countries were also able to join their German neighbours in voting for their local district – or Bezirk – councillors.

At the very least, all of these contests would need to be run again in the six districts affected by the logistical issues.

The Berlin constitutional court, which has only published a preliminary opinion so far, didn’t indicate whether these six districts alone would vote again – or whether the entire city was headed back to the polls.

Could the entire city have to vote again? How many districts were affected?

The court has three months to issue its full ruling, which will tell us whether all of Berlin is voting again or whether it’s just a few districts.

There are different estimates too for how many voting stations may have had problems.

Building Senator Andreas Geisel reckons 14 voting stations had results that were so close that even a slight change in how they vote could have a big impact on the overall result.

Berlin’s former returning officer found glitches in 207 polling stations out of the city’s 2,300.

Traffic light politicians though, who sit in the Bundestag’s Elections Review Committee, think at least 300 out of Berlin’s 2,300 voting stations will have to vote for their Bundestag representative again.

Social Democrat MP Johannes Fechner has moved to repeat the Bundestag contests only in these 300 or so stations.

The committee is likely to agree with him, but this would affect only the federal contests, leaving the state of Berlin to decide whether to rerun Berlin state elections, votes for the local council, and the housing referendum.

Could it change the final result?

Any effect of a swing in votes on who sits in the Bundestag would be quite small. Only a couple of seats could be at risk of changing hands.

While some parts of Berlin could theoretically wake up with a new parliamentarian representing them locally, not enough seats are up for grabs to change the federal traffic light coalition.

The city, council, and referendum votes are another matter.

The referendum originally passed with 56 percent of the vote – a clear victory, but not a landslide.

Ballot papers outside a Berlin polling station

Ballot papers outside a Berlin polling station on election day. Photo: picture alliance/dpa | Sebastian Gollnow

READ ALSO: Berlin’s super election day: What does it mean for the city’s housing shortage?

The city vote in particular was very close in 2021, with Mayor Franziska Giffey’s Social Democrats finishing only 2.5 percent ahead of the second-place Greens – and less than three percent ahead of Berlin’s conservative Christian Democrats (CDU).

With Giffey having lost ground in recent polls, the SPD could lose the Berlin Mayor’s Office in a revote – a post it has held for most of the post-war era—even if only a few districts vote again.

When could this happen?

Berlin’s constitutional court has until the end of the year to issue a full ruling, which will tell us what the scale of the revote will be.

A new contests would be, by some expert estimates, likely in April 2023.

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